The Almost Daily 2¢ - The Audacity!

So much for our “new technology” president…

In a recent New York Times article President Obama states very clearly that he doesn’t find blogs to be a reliable source of information:

“Part of the reason we don’t spend a lot of time looking at blogs,” he said, “is because if you haven’t looked at it very carefully, then you may be under the impression that somehow there’s a clean answer one way or another — well, you just nationalize all the banks, or you just leave them alone and they’ll be fine.”

You know what I don’t find reliable?

Very obviously junk economic forecasts used as a basis for misguided and immensely costly public policy.

Take a look at this important chart from the Obama administration’s document titled “The Job Impact of The American Recovery and Reinvestment Plan” published on the 10th of January in advance of the house and senate votes.

Notice that the “With Recovery Plan” unemployment rate was forecast by an obviously delusional (or otherwise untruthful) Christina Romer and Jared Bernstein (key Obama economic advisers) to “top out” at about 8% unemployment…

Well, as of February the official unemployment rate was 8.1%... so less than 30 days later and we are above the peak estimate for their absurd and fictitious forecast…

You see… the notion that their pork-laden deficit spending plan could prevent the onslaught of double-digit unemployment was more than unreliable… it was total farce.

This really gets to the heart of the matter… the Obama administration is no “breath of fresh air” on the economic front… they are simply “more of the same” Washington insiders with no sense other than the thirst for control to guide their policy.

In fact, they now appear clearly, as Chief of Staff Rahm Emanuel put it recently, to have not let “a serious crisis to go to waste” when crafting a policy response that was short on immediate economic stimulus but long on longstanding big government objectives.

They have zero credibility (as the stock market has quite nicely demonstrated as of late) and I believe that soon it will be perfectly obvious to all how woefully unprepared and misguided the new president and his administration truly are.

The Almost Daily 2¢ - Greater Fool’s Day!

I’d like to propose that February 1st be, this year and forever, known and celebrated as “Greater Fool’s Day!”

What better and more fundamental a theme for Americans to observe (at least once a year) than the lust for fast cash, easy money, celebrity lifestyle and fame and fortune leading to the inevitable national panic and widespread financial ruin.

Yes, on this day we can pay homage to all the half-baked Ponzi-schemes that have ever swept our great nation, drawing in throngs of wide eyed “investors” full of optimism and greedy animal spirits only to finally see them crapped out again as total losers faster than our country’s macroeconomic fabric could withstand.

And what better a generation of Americans to begin this celebration than our current?

In the course of 20 short years there have been not one but THREE, successively larger, national financial calamities (S&L, dot-com, Great Housing Bubble) culminating in our current most dire predicament… truly an historic achievement in and of itself!

But, this day of celebration is not meant to be mean spirited … no … it should be a day of collective remembrance, humor and socialized atonement for all our individual acts of foolishness and stupidity.

It’s not like anyone had a gun to your head forcing you to sign the mortgage documents resulting in that 65% debt-to-income ratio or to hand over your retirement savings, paycheck after paycheck, to the “safety” of the mutual fund manager and his “well diversified” investments.

Risk was always a factor but you shirked it… even welcomed it!… and here we are… but this was a collective delusion and you are certainly not alone so why suffer individually?

So, I hereby declare February 1st to be “Greater Fools Day!”

Aside from observing the day I would also like to propose a few possible rituals that can be carried out throughout the holiday to better, and more publicly, celebrate the foolish spirit.

First, on the night of January 31st, now and forever to be known as “All Losers Eve” I propose, as a preparatory ceremony, a family, community or otherwise shared reading of the chapter titled “Financial Crisis: A Hardy Perennial” of Charles Kindleberger’s classic title “Manias, Panics, and Crashes: A History of Financial Crises”.

A better synopsis of bubble history, the bubble paradigm and post-bubble collapse has likely never been written.

Now, as for February 1st…

For those of you stuck “holding the bag” so to speak I would suggest that you distinguish yourself… Mark yourself so that others may identify your level of foolishness.

Perhaps consider wearing a tag specifying the year in which you bought your “dream home” and your level of indebtedness.

For example, your tag could read: “2006 – 100% LTV - 67% DTI – 75 days in Arrears!”

Or, for Boomers, simply indicate the year in which you would be solidly prepared for retirement and your desired location such as “Ft. Lauderdale – 2079!”

As for the many renters who were so lifelessly thrown to the side during the Great Housing Bubble or those rare “Cassandra’s” and “Chicken Little’s” who saw the whole mess brewing, sold their homes in 2005-2006 and pulled all their cash to the sidelines I would suggest that you spend the entire day patting yourself on the back while frequently screaming “see, I told you so!” and very publicly dancing that “happy jig” you have so impeccably refined in private.

Rejoice! Rejoice! You have no choice!

Question(s) of The Day - No Way Out?

Aren’t millions of American households simply trapped by historic levels of debt and a quickly eroding and unsteady employment outlook?

How do they get out of this mess?

Is there a way out of this mess other than bankruptcy and foreclosure?